Finance Act 1952

PART II Purchase Tax

8 Abolition of special provision for utility articles

(1) Subject to the following provisions of this Part of this Act, purchase tax shall be chargeable in respect of goods of any description which are utility articles in the same cases and at the same rates as it is now chargeable in respect of goods of that description which are not utility articles.

(2) Accordingly in Part I of the Eighth Schedule to the Finance Act, 1948, there shall be made the amendments provided for by paragraph 1 of the Third Schedule to this Act.

(3) The foregoing provisions of this section shall have effect subject to any order made by the Treasury after the passing of this Act under section twenty-one of the Finance Act, 1948.

(4) Subsection (2) of the said section twenty-one (which applies section two of the Finance Act, 1945, so as to authorise Treasury orders to define a class of goods by reference to any mark the use of which the Board of Trade have power to regulate) shall cease to have effect.

(5) This section, except in relation to utility furniture and component parts of utility furniture, shall have effect as from the seventeenth day of March, nineteen hundred and fifty-two, but in relation to utility furniture and component parts of utility furniture shall not come into force (except the last foregoing subsection) until the coming into force under the next following section of a Treasury order containing a prescribed list for furniture.

9 Discharge or reduction of tax in certain cases

(1) This section applies to the three following classes of goods, namely.—

(a) wearing apparel (including handkerchiefs);

(b) cloth, plastic sheeting which is of a kind suitable for making garments or curtains, tablecloths and similar soft furnishings, domestic textile articles, soft furnishings and bedding, but excluding floor coverings and material for floor coverings;

(c) furniture of a kind used for domestic purposes, but excluding clocks, musical instruments, heating or lighting appliances and apparatus and appliances and apparatus operated by gas or electricity.

(2) Where purchase tax is or would but for this section be chargeable in respect of any article or articles falling within any of those three classes, being an article or articles of one of the descriptions specified in the prescribed list for that class, then subject to the following provisions of this section—

(a) if the wholesale value of that article or of any of those articles, as the case may be, does not exceed the amount specified in the list in relation to that description, the tax shall not be chargeable in respect of the article in question; and

(b) if the wholesale value of the article or of any of the articles does exceed the amount so specified, the tax chargeable in respect of the article in question shall be chargeable on the excess only instead of on the wholesale value of the article.

(3) The list contained in Part I of the-Fourth Schedule to this Act shall be the prescribed list for the first of the classes mentioned in subsection (1) of this section, and the list contained in Part II of that Schedule shall be the prescribed list for the second:

Provided that the Treasury shall have power by order to make any addition to, omission from or other change in the descriptions specified in the lists for those classes, to vary the amounts so specified and to amend the said Schedule.

(4) The prescribed list for furniture shall be such list as may be prescribed by order of the Treasury.

(5) Subsections (3) to (6) of section twenty-one of the Finance Act, 1948 (which contain supplementary provisions about orders under that section, including provision for their submission to the House of Commons), shall apply to orders of the Treasury under this section, and any such order which has the effect of increasing the tax chargeable in respect of any articles shall be treated as an order increasing the rate of tax for the purposes of subsection (5) of that section (which relates to orders requiring affirmative approval by resolution of the House of Commons).

(6) An article shall be treated for the purposes of this section as excluded from any description specified in the prescribed list for a class of goods within which the article falls, if the article is comprised in some other description so specified and, of the amounts specified in the list or lists in relation to those descriptions, the amount specified in relation to the second mentioned description is the lower (or, where either amount is such as to be different for different articles, is the lower for that article).

(7) Without prejudice to the generality of section thirty-three of the Finance (No. 2) Act, 1940, regulations may be made by the Commissioners under Part V of that Act providing for any matter for which provision appears to them to be necessary for the purpose of giving effect to this section, and in particular for prescribing a distinguishing mark for any material or class ot material, for regulating the use of any such mark, and for treating articles of any description which are not marked with the distinguishing mark for a particular material or class of material as articles of some other material or class of material.

(8) Without prejudice to subsection (2) of the said section thirty-three (which penalizes offences under regulations of the Commissioners), any person who—

(a) knowingly Or recklessly uses a distinguishing mark prescribed for the purposes of this section in connection with articles to which it is not appropriate; or

(b) with intent to deceive uses in connection with any articles any mark resembling a mark prescribed for those purposes;

shall be liable to a penalty of five hundred pounds or to imprisonment for a term not exceeding two years or to both; and for the purposes of this subsection a person shall be deemed to use a mark in connection with any article if he marks it with the mark or if he sells it, delivers it on sale or exposes or offers it for sale marked with the mark.

(9) In the enactments relating to purchase tax the expression " chargeable goods " shall include any article of a description in respect of which tax is for the time being expressed to be chargeable under Part I of the Eighth Schedule to the Finance Act, 1948, as amended, notwithstanding that by virtue of this section tax is not chargeable in respect of the article.

(10) Subsections (1) and (2) of section twenty-one of the Finance (No. 2) Act, 1940 (which define wholesale value and provide for arbitration on disputes as to wholesale value), shall apply in relation to the wholesale value of chargeable goods in respect of which by virtue of this section tax is not or may not be chargeable, as they would apply if the tax were chargeable; and in the proviso to subsection (2) of that section (which provides that, Unless certain conditions are fulfilled, a dispute shall not be referred to arbitration, but tax shall be chargeable on the wholesale value as fixed by the Commissioners) for the words " on the wholesale value " there shall be substituted the words " on the basis of the wholesale value ".

(11) Section twenty-four of the Finance Act, 1948 (which relates to the effect of changes in the charge to tax in relation to pre-existing contracts), shall apply to any change made by or under this section in the goods in respect of which tax is chargeable or in the amount of tax chargeable in respect of any goods as it applies to changes made in the clashes of goods which are chargeable goods or in the rate at Which tax is chargeable in respect of any goods.

(12) This section, except in relation to the third of the classes mentioned in subsection (1), shall have effect as from the seventeenth day of March, nineteen hundred and fifty-two:

Provided that as respects the periods mentioned in Part III of the Fourth Schedule to this Act the prescribed lists shall be the lists contained in Parts I and II of that Schedule modified in accordance with the said Part III.

10 Intermediate rates of tax, and goods chargeable at those rates

(1) In addition to the first, second and third rates of purchase tax provided for by section twenty of the Finance Act, 1948 (which are respectively one-third, two-thirds and one hundred per cent. of the wholesale value of the goods), there shall be a first intermediate rate and a second intermediate rate which shall be respectively one quarter and one half of that value; and in Part I of the Eighth Schedule to the said Act the words " First intermediate " and " Second intermediate " shall be construed accordingly.

(2) In the said Part I the word " intermediate " shall be inserted in the second column after the word " First " throughout Groups 1 to 7 and after the word " Second " throughout those Groups and in Group 9.

(3) In paragraph (a) of subsection (1) of section twenty-one of the Finance Act, 1948 (under which the Treasury have power by order to alter the classes of chargeable goods and the rates at which they are chargeable), the reference to the rates of purchase tax provided for by the enactments relating to purchase tax shall include the rates provided for by this section, and subsection (2) of this section shall have effect subject to any order made by the Treasury under the said section twenty-one after the passing of this Act.

(4) This section shall have effect as from' the fourteenth day of May, nineteen hundred and fifty-two.

11 Reduction of tax on fur-trimmed garments and fur gloves

(1) Garments trimmed with fur skin (including any skin with fur, hair or wool attached), but not otherwise made thereof, shall cease to be comprised in paragraph (f) of Group 1 in Part I of the Eighth Schedule to the Finance Act, 1948, and (except so far as they are comprised in some other paragraph of that Group) shall—

(a) if of a kind suitable for young children's wear, be exempt from purchase tax ; and

(b) if not of such a kind, be comprised in paragraph (a) of the Group:

Provided that this subsection shall not apply to any such garment in the case of which the trimming of fur skin either—

(i) represents a cost to the manufacturer of the garment greater than the cost to him of the other components; or

(ii) has an area greater than one-fifth of the area of the outside material.

(2) Accordingly in the said Group 1 there shall be made the amendments provided for by paragraph 2 of the Third Schedule to this Act.

(3) For the purposes of subsection (1) of this section and of Part I of the said Eighth Schedule, the cost of any component of a garment to the manufacturer of the garment is to be taken to be the total cost to him of that component ready for assembly into the garment:

Provided that where the Commissioners are not satisfied both—

(a) that the whole of the cost of the component was actually borne by the manufacturer of the garment; and

(b) as to the amount thereof ;

there shall be substituted for the actual cost to him the cost which in their opinion would be incurred by a manufacturer of a similar garment who did bear the whole of the said cost.

(4) If, in ascertaining the amount of tax for which any person is accountable, any dispute arises as to the amount which is to be taken for the purposes aforesaid to be the cost of any component of a garment to the manufacturer of the garment, subsections (2) and (3) of section twenty-one of the Finance (No. 2) Act, 1940 (which provide for arbitration in the event of disputes as to wholesale value), shall apply with the necessary modification of any reference to the wholesale value of the goods.

(5) Subsections (1) and (2) of this section shall have effect subject to any order made by the Treasury after the passing of this Act under section twenty-one of the Finance Act, 1948, and any such order varying or revoking subsection (1) of this section may, in connection therewith, vary or revoke subsection (3) of this section.

(6) Subject to any order made by the Treasury under the said section twenty-one after the passing of this Act, gloves made wholly or partly of fur skin (including any skin with fur, hair or wool attached) shall be comprised in paragraph (a) of Group 3 in Part I of the Eighth Schedule to the Finance Act, 1948, and paragraphs (b) and (c) of that Group shall accordingly be omitted.

The Purchase Tax (No. 11) Order, 1950 (which amended the said paragraph (b)), is hereby revoked.

(7) This section shall have effect as from the seventeenth day of March, nineteen hundred and fifty-two, except that the last foregoing subsection shall only have effect as from the fourteenth day of May, nineteen hundred and fifty-two.

12 Giving of invoices, and taking of samples

(1) Without prejudice to the generality of section thirty-three of the Finance (No. 2) Act, 1940, regulations may be made by the Commissioners under Part V of that Act for requiring invoices or similar documents to be given, in such cases as may be prescribed, in connection with sales of purchase tax goods, in connection with sales of other goods in the course of a business which includes the selling of purchase tax goods and in connection with contracts for the application by one person to the order of another of a process of manufacture resulting in purchase tax goods, not being goods which at the time of the completion of the process are the property of the person applying the process.

(2) Regulations made for the purposes of the foregoing subsection may include provision—

(a) for prescribing the form of any document to be given under the regulations and the particulars to be stated in it, and for requiring" it to be given within such time as may be fixed by or under the regulations;

(b) for imposing on a person to whom any document is required to be given in connection with a transaction entered into in the course of his business an obligation to ask for it in the event of any failure to give it and, if the failure continues, to report that fact to the prescribed person;

(c) for requiring a person to whom any document is given as aforesaid in accordance with the regulations to keep it for the prescribed time, and for requiring a person giving any document as aforesaid in accordance with the regulations to keep a copy of it for the prescribed time;

(d) for any incidental or supplementary matters.

(3) An officer of Customs and Excise, if it appears to him necessary for the protection of the revenue against mistake or fraud, may at any time take, from the goods in the possession of any person in the course of a business which includes the manufacture or sale of purchase tax goods, such samples as the officer may require with a view to determining how the goods or the materials of which they are made ought to be or to have been treated for purposes of purchase tax.

(4) Any sample taken under this section shall be disposed of and accounted for in such manner as the Commissioners may direct.

(5) Where a sample is taken under this section from the goods in any person's possession and is not returned to him within a reasonable time and in good condition, the Commissioners shall pay him by way of compensation a sum equal to the cost of the article to him or such larger sum as they may determine.

(6) The expenses of the Commissioners under the last foregoing subsection shall be defrayed out of moneys provided by Parliament.

(7) In this section the expression " purchase tax goods " means goods of any description for the time being included in Part I of the Eighth Schedule to the Finance Act, 1948, as amended, whether chargeable goods or not; and for the purposes of this section the question whether any goods are purchase tax goods—

(a) in relation to the giving of an invoice or similar document in connection with a sale of those goods, shall be determined as at the time when they are delivered in pursuance of the sale; and

(b) in relation to the giving of an invoice or similar document in connection with a contract for the application of a process of manufacture resulting in those goods, shall be determined as at the time when the process is completed.